On Wednesday, Susquehanna has revised its price target for Lockheed Martin (NYSE:LMT) shares, lowering it to $695 from the previous figure of $705, while maintaining a Positive rating on the stock. The adjustment follows the company's third-quarter financial report for 2024.
Lockheed Martin's third-quarter earnings surpassed expectations, with an adjusted earnings per share (EPS) of $6.84, which was notably higher than the $6.39 estimate. Despite these strong results, the forecast for 2025 predicts low-single-digit revenue growth, which falls short of both the analyst's and the market consensus expectations. This projection likely played a role in the stock's decrease in value yesterday.
The company's preliminary outlook for 2025 has led to a revised EPS estimate of $26.72, down from the previous $28.20. This change is attributed to the conservative revenue growth forecast and year-over-year pension challenges. Nevertheless, the analyst reaffirms a fundamentally positive stance on Lockheed Martin, citing a robust growth trajectory supported by various factors.
Lockheed Martin boasts a record backlog of $165 billion as it exited the third quarter, which, along with increased geopolitical tensions, the global need to replenish defense equipment, and rising international spending, is expected to drive free cash flow growth in the upcoming years. These elements contribute to the sustained positive outlook for the defense contractor's financial performance.
In other recent news, Lockheed Martin's third-quarter adjusted earnings per share (EPS) of $6.84 exceeded expectations, but its total revenue of approximately $17.1 billion fell slightly short. Despite this, RBC Capital maintains an Outperform rating on the stock, albeit with a reduced price target of $665. The company's Missiles and Fire Control segment demonstrated growth, and its F-35 program is reportedly recovering well.
Recent developments include Lockheed Martin raising its profit and sales outlook for 2024, with an expected profit per share of $26.65 and full-year sales of $71.25 billion. However, Goldman Sachs maintains a Sell rating on the company's shares, citing potential slowdown in organic revenue growth.
Deutsche Bank also adjusted its price target for Lockheed Martin to $611.00, while maintaining a Buy rating. The company's board has authorized an increase in its quarterly dividend and a $3 billion expansion of its share repurchase program.
In related news, Raytheon Technologies (NYSE:RTX) Corporation revised its 2024 profit and sales forecasts upwards due to robust demand for aircraft repairs and defense systems.
Furthermore, Australia announced a $4.7 billion acquisition of SM-2 IIIC and SM-6 long-range missiles from the United States, and Lockheed Martin appointed Chauncey McIntosh as the new vice president and general manager of the F-35 Lightning II Program.
InvestingPro Insights
Lockheed Martin's financial performance and market position align with several key metrics and insights from InvestingPro. The company's market cap stands at an impressive $136.17 billion, reflecting its status as a major player in the Aerospace & Defense industry. This is further supported by an InvestingPro Tip highlighting Lockheed Martin as a "prominent player" in its sector.
The company's revenue for the last twelve months as of Q3 2024 reached $71.3 billion, with a growth of 5.33% over the same period. This growth, albeit modest, aligns with the article's mention of the company's forecast for low-single-digit revenue growth in 2025.
Moreover, Lockheed Martin's strong financial position is evident in its dividend history, with an InvestingPro Tip noting that the company "has raised its dividend for 22 consecutive years" and "has maintained dividend payments for 41 consecutive years."
While the article discusses the company's robust backlog and positive future outlook, it's worth noting that Lockheed Martin's P/E ratio stands at 22.21, which an InvestingPro Tip suggests is "high relative to near-term earnings growth." This could be a factor for investors to consider alongside the company's strong market position and dividend history.
For readers interested in a more comprehensive analysis, InvestingPro offers 14 additional tips for Lockheed Martin, providing a deeper understanding of the company's financial health and market performance.
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